"(b) No refund shall be allowed or made after three
years from the time the return was filed, or two years
from the time the tax or a portion thereof was paid,
whichever period expires the later, unless before the
expiration of such period a claim for refund is filed by
the taxpayer in compliance with ORS 305.270, nor shall a
refund claimed on an original return be allowed or made
in any case unless the return is filed within three years
of the due date, excluding extensions, of the return in
respect of which the tax might have been credited. If a
refund is disallowed for the tax year during which excess
tax was paid for any reason set forth in this paragraph,
the excess shall not be allowed as a credit against any
tax occurring on a return filed for a subsequent year.
If the tax owed after offsets for all amounts owed the
state is less than $5, no refund shall be made."

Under the facts established by taxpayers' own
testimony, their 1994 income tax return was filed more than three
years after the due date and; therefore, no refund or credit may
issue.

Mrs. Jones argues that the department should have
looked to see if any taxes were owing and, if none, the
department should have returned the amount to taxpayers.
However, this position is not consistent with the facts.
Taxpayers had paid their 1993 liability in full in August 1994
when they filed their 1993 return. Consequently, they knew on
September 15, 1994, when they sent the department $10,000, that
there were no taxes owing. Therefore, taxpayers appear to have
intended the amount to be applied as an estimated payment for
1994. Certainly with a check payable to the department, the only
reasonable assumption is that it was intended as payment of a
past, present, or future tax liability.

Second, taxpayers themselves have characterized the
amount as a "tax" payment. When taxpayers filed their 1994
return, they treated the $10,000 payment as estimated tax paid.
If taxpayers truly believed that the amount was not an estimated
tax payment, they would have asked the department to return the
amount in some other way. They did not do so. Instead, they
signed a return, under oath, indicating that the amount was an
estimated tax payment for which they sought a refund.

The court is mystified as to why experienced business
people with access to professional advisors would decide to send
a check to a tax department without a single word of explanation
or instruction. It is also a mystery why such a large amount
would be left on deposit with the department when taxpayers must
have known as early as 1996 or 1997 that no taxes would be due.
While the court has great sympathy for taxpayers, their claim is
governed by laws. The court is duty bound to uphold those laws.

The overwhelming evidence indicates that the $10,000
paid to the department was an estimated tax payment. Under the
applicable laws, taxpayers were obligated to file a claim for
refund within the time limits allowed. Their failure to do so
affords the court no alternative but to deny their claim for
refund. Costs to neither party.

2. If the court found that the amount involved was not a tax
refund and not governed by the tax laws, the court would have no
jurisdiction over this matter and could not grant taxpayers any
relief. See ORS 305.410.